The Price of Mining Wealth in Chiapas

In terms of natural resources, the state of Chiapas in southern Mexico is one of the richest in the country. As a base of operations for major mining companies both in Mexico and abroad, Chiapas is a major source of oil, gas, and lumber, as well as metallic minerals such as gold, silver, copper, iron, aluminum, uranium, and titanium. These metals find their way into the cellphones, laptops, aircraft, medical supplies, and modern architectures sought in consumer countries. With the steady privatization and opening of mining to foreign ownership in recent years, mining has fueled economic growth and facilitated the rise of great fortunes in Mexico.

As these fortunes grow, however, rural populations in states like Chiapas are suffering serious fallout from the mining boom. On a recent trip to the region of Soconusco in southern Chiapas, I visited an area situated near two titanium mines. The two major rivers from which residents get their drinking water are now contaminated by toxic particles used in the mining process and later released into the rivers; I was warned not to even touch the water. A local doctor and nurse had established that the cancer rate among local residents had risen by more than three times in a 10-year period, in parallel with the increase in mining activity in the area. They also described a sharp rise in skin rashes and gastrointestinal disorders, which they attributed to the toxins.

Residents also told how the stock of fish in one river area was now greatly depleted and many of the fish that remained were so deformed that they could not be sold at the market. With fishing and farming in decline, some had given up, sold their property to the mining company, and migrated elsewhere. Others were turning to crime or begging.

Mexico’s economy has liberalized rapidly in the last two decades, and mining has featured largely in the process. The original Constitution of 1917 regards land and water rights as non-commodities to be administered by the state for the common good. The formation of ejidos, a system of collective ownership of land, allowed rural laborers to engage in cooperative decision making about the use of natural resources. Water rights were linked to agricultural property rights and could not be bought, sold, or used on other lands. A 1961 law required all mining companies to be at least 51 percent owned by Mexican nationals, and the state played a significant role in managing the mines.

The economic crises of 1982 and 1994 stimulated a reversal of this state-led approach to development and opened the way for neoliberal reform. In exchange for much-needed international credit, the World Bank and other international lenders used the opportunity to press the Mexican government to privatize and deregulate the country’s natural resources. A series of mining law reforms followed that allowed foreign firms to become majority owners in mining companies and gave them greater freedom to explore and extract minerals. Requirements regarding the use of local content and technology transfer were eliminated, tariffs on trade and imports of machinery were lowered, and the term for concessions was increased to 50 years. A 1992 law declared that mining activities would “be given preference over any other use or productive utilization of the land.”

In 2012, faced with falling prices for metallic minerals, incoming president Enrique Peña Nieto made a new push for neoliberal reforms. These reforms, aimed at the education, labor, energy, finance, and telecommunications sectors, were all subject to strong public opposition. To broaden his base of support, Peña Nieto sought out a “Pact for Mexico” between the four major parties. With input from the leftist PRD, the Pact affirmed Peña Nieto’s neoliberal agenda, but also aimed to “deepen democracy and citizen engagement in politics” while exploiting natural resources in “sustainable and innovative ways.”

Mining would be turned into an “efficient and socially responsible industry” whose benefits “must include the inhabitants of the zones where it is established.” A new royalty tax of 7.5 percent on earnings would generate revenues, most of which would flow directly to the municipalities and communities where mining operations were taking place. Plans were also be made “for concerted action to respect the traditions and social cohesion of the communities concerned.” While a number of foreign-owned mining companies balked, there was no rush for the door. As Dan Dickson of Endeavor Silver put it, “We still think it is an advantage to be in Mexico as the geology is great and the environmental permitting is faster than in other jurisdictions.”

A Fund for Sustainable Regional Development was set up for the administration of the mining royalties that included representatives of the state or municipalities near the mines, the mining companies, and the rural communities in the vicinity. These representatives would deliberate on how the funds would be spent whether for schools, roads, public lighting, or the like. The Fund was also intended to support sustainable development that would “preserve the ecological balance, protect the environment and use natural resources so as not to compromise the satisfaction of the needs of future generations.”

There was a dark side to the Pact as well. A joint effort “between the authorities and businesses” would be conducted “in order to provide timely solutions for the problems the industry is facing.” This entailed a closer fusing of the Federal Police with mining companies through greater onsite presence, the sharing of police intelligence, and development of new channels of communication. While criminal organizations were one reason why these measures were implemented, another was that rural people were fighting to hold onto their land and demanding accountability from mining companies. In wresting control, mining companies are known to pay local residents to spy on activists, disrupt meetings, and distribute false information as well as to threaten, harass, physically assault, and even kill anti-mining activists. In light of this, the pact between private companies and the Federal Police has posed new dangers to activists.

The Pact for Mexico has failed to fulfill its sustainability goal, and officials blame this on rural communities, which they claim oppose mining. As Minister of Economy Ildefonso Guajardo observed, “communities become opponents of mining activity … simply because they aren’t seeing enough benefit [emphasis added].” In other words, the problem in their view wasn’t that mining caused environmental damage and the breakdown of community; it was simply that communities were not partaking in the material wealth produced by mines. This assumption was built into the system of deliberation on the use of royalty funds—local community representatives had the privilege of determining how funds from the royalty tax would be spent, not whether or not a mine would be allowed into their communities.

In the meantime, the community of Soconusco has joined 2,000 others throughout the country in declaring itself “mining free.” Activists have marched, leafleted, given interviews, and blocked the passage of mining machinery on roads to the mines, and, here and there, have won results. As of this writing, they have managed to shut down three of the several mines in the area at least temporarily.

Finally, this is not simply a story about the people in Mexico. As water and farmland are contaminated by mining runoff in various parts of the world, so too are many of the fruits, vegetables, and seafood that people in the U.S. and other “developed” countries are likely to consume. As our own health is affected along with the wellbeing of those in more immediate danger, it is incumbent upon us to reduce our demand for titanium and other metallic minerals whenever possible. We can do this by cutting back on our consumption of high-tech products, carefully recycling those we use, and awakening to a more sustainable lifestyle. In the end, there is really only one environment, the one that sustains us all.

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Lynn Holland teaches international political economy and Latin American studies courses at the Josef Korbel School of International Studies. Last December, she toured rural areas of Chiapas, Mexico, with a delegation from the Denver Justice and Peace Committee to learn more about the effects of large-scale metal mining and related development issues there.